2020 (6) TMI 478 - HC - GST

Vires of Rule 117(1A) of Central Goods and Service Tax Act, 2017 - time limitation - permission to petitioner to electronically upload form TRAN-I or avail input tax credit in monthly return GSTR-3B - HELD THAT - The Petitioner has challenged vires of Rule 117 (1A) of Rules, however we do not think it appropriate to declare it invalid as we are of the considered opinion that Petitioner is entitled to carry forward VAT Credit/ITC accrued under Punjab Value Added Tax Act, 2005. The Respondents have repeatedly extended date to file TRAN-I where there was technical glitch as per their understanding. Repeated extensions of last date to file TRAN-I in case of technical glitches as understood by Respondent vindicate claim of the Petitioner that denial of unutilized credit to those dealers who are unable to furnish evidence of attempt to upload TRAN-I would amount to violation of Article 14 as well Article 300A of the Constitution of India. Reliance can be placed in the case of ADFERT TECHNOLOGIES PVT. LTD. VERSUS UNION OF INDIA AND ORS. 2019 (11) TMI 282 - PUNJAB AND HARYANA HIGH COURT where it was held that Respondents are directed to permit the Petitioners to file or revise where already filed incorrect TRAN-1 either electronically or manually statutory Form(s) TRAN-1 on or before 30th November 2019. The Respondents are directed to permit Petitioner to upload TRAN-I on or before 30.06.2020 and in case Respondent fails to do so, the Petitioner would be at liberty to avail ITC in question in GSTR-3B of July 2020 - petition allowed.

Summary

Issues:
Challenging vires of Rule 117(1A) of Central Goods and Service Tax Act, 2017 and seeking direction to permit electronic upload of form TRAN-I or avail input tax credit (ITC) in monthly return GSTR-3B.

Detailed Analysis:

Issue 1: Vires of Rule 117(1A) of CGST Act
The Petitioner challenged the validity of Rule 117(1A) of the CGST Act, contending that it violated Article 14 and Article 300A of the Constitution. The Respondents extended the deadline for filing TRAN-I in cases of technical glitches, but the Petitioner argued that the denial of unutilized credit without evidence of an attempt to upload TRAN-I would be discriminatory. The Court, while not declaring the rule invalid, held that the Petitioner was entitled to carry forward VAT Credit/ITC accrued under the Punjab Value Added Tax Act, 2005. The Court emphasized that repeated extensions for technical glitches supported the Petitioner's claim of violation of constitutional rights.

Issue 2: Judicial Precedents
The Counsel for the Petitioner cited the judgment in Adfert Technologies Pvt. Ltd. Vs Union of India, which was upheld by the Delhi High Court in the case of Brand Equity Treaties Ltd. The Delhi High Court criticized the narrow interpretation of "technical difficulties" under Rule 117(1A) as arbitrary and discriminatory. The Court emphasized that the Government should adopt fair and reasonable standards without differentiating between taxpayers and itself. The judgments highlighted the protection of taxpayers' rights and the importance of a broader understanding of technical difficulties beyond portal issues.

Issue 3: Relief Granted
Considering the precedents and the arguments presented, the Court allowed the present petition. The Respondents were directed to permit the Petitioner to upload TRAN-I by 30.06.2020. In case of failure by the Respondent, the Petitioner was granted liberty to avail ITC in the GSTR-3B of July 2020. The Court emphasized that the Respondents could verify the genuineness of the Petitioner's claims. The decision was based on upholding the Petitioner's rights and ensuring fair treatment under the law.

In conclusion, the judgment addressed the challenge to Rule 117(1A) of the CGST Act, analyzed relevant judicial precedents, and granted relief to the Petitioner based on constitutional rights and legal principles. The Court's decision emphasized fairness, protection of taxpayer rights, and the need for a broader interpretation of technical difficulties in tax compliance.